Ukraine crisis and euro biggest factors in Latvian EU vote

Walking through Rīga these days, you can spot several small signs that show the euro is something new in Latvia. Prices in shops and cafés are uneven, cashiers take a little longer to count the change and price tags still show amounts in lat and euro.

Having adopted the common European currency only at the start of this year, most Latvians are still adjusting to the unfamiliar notes and coins.

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Price tags still show amounts in lat and euro (Photo: Sophia Schirmer)

"I think that the European Parliament elections will be a first evaluation of how we coped with the euro changeover and whether the image of the EU overall has increased or decreased," says Rihards Kols, MEP candidate for the Latvian party National Alliance.

Before the euro was introduced on 1 January, there was widespread public opposition against the common currency. This negative feeling is still looming in some parts of society, and also in some factions of Latvian politics.

Left-wing remains sceptical towards euro

"We are not against European integration. But we voted against the euro because we are sure that it's not the right time for Latvia to join the eurozone," says Igor Pimenov.

He is standing in the European elections in May representing the left-wing political group Concord Centre.

"First, we have to make all EU countries more similar as far as the balance of imports and exports is concerned." In order to achieve this, the EU has to refrain from its neo-liberal paradigm, says Pimenov.

Concord Centre is currently the biggest political group in the Latvian parliament, but it sits in opposition. In the European elections in May, the group has been predicted to win 35 percent of the votes.

The second political group in parliament that voted against the euro is expected to receive broad support as well: the Union of Greens and Farmers will receive 20 percent, according to the polls.

The largest share of the remaining votes (26 percent) will go to Unity, the party of former Prime Minister Valdis Dombrovskis, which is among the main supporters of the EU and the euro in Latvia.

When the economic crisis hit the country in 2008, it was Dombrovskis's government that decided to introduce strict austerity measures in order to get the country's economy back on track and introduce the common currency.

Dombrovskis is the leading candidate for Unity for EU vote later this month. He had sought candidacy for the post of Commission President in the European People’s Party but was outvoted in favour of ex-Luxembourg leader Jean-Claude Juncker.

The euro in Latvia was also supported by the National Alliance (NA). "At the moment, this is the best opportunity that we can have," says Kols, MEP candidate for the NA.

"It's not only about economic means, it is also about national security. Taken from a geopolitical point of view, there was no alternative for that. We need to stress that Latvia is an integral part of the EU," he says, alluding to the current crisis in Ukraine.

"When it comes to Ukraine, Latvia looks to the EU to solve the matter as soon as possible," he says.

Yet the party's programme for the European elections mostly defends Latvia's national interests.

"We do not support deeper integration or the federalisation of Europe," says Kols. "We want to stress that we are for a European Union of nation states, where the national interests are higher than the European interests. From now on, any question that is in national competencies stays in national competencies."

The NA's current MEP and leading candidate for the elections in May, Roberts Zīle, sits with the anti-federalist European Conservatives and Reformists Group. The NA is expected to gain 10 percent of the votes in May.

The influence of the Ukraine crisis

As far as the Latvian public is concerned, the crisis in Ukraine has made some opponents rethink their attitude towards the EU and the euro.

"Many Latvians are happy to be part of the EU and NATO, because it gives them security against Russia," says Arnis Kaktins, director of the Latvian research company SKDS.

"For ethnic Russians, however, this is different. A lot of them supported the actions of Russia in Crimea."

This is significant given that nearly one third of Latvia's population is ethnic Russian, and research by SKDS shows that many of them feel more connected to Russia than to the EU.

Statistics from 2013, for instance, show that the proportion of Russian-speakers who were against the introduction of the euro was higher than that of ethnic Latvians.

According to Kaktins, the main reason for this is Russia's influence in Latvia through media, education and the economy.

"There is a big difference in how Russian and Latvian media portray the EU. A lot of Russian speakers [in Latvia] heavily consume Russian media and obviously this influences how they see the world."

Stronger cooperation with Russia

Tatjana Zdanoka from the Latvian Russian Alliance sees things differently. She believes there is discrimination against Russians in Latvia and criticizes the EU for having "double standards" concerning the protection of minorities in Europe.

"If anti-Semitism and racism is prohibited, we also have to prohibit 'Russophobia', which is very widespread in Europe. As a Russian, I can feel it."

Zdanoka is one of Latvia's current MEPs and sits with the Greens/EFA. The group is considering throwing her out because of her controversial statements concerning the situation in Ukraine.

Zdanoka attracted criticism after she went to Crimea as an observer for the referendum on independence from Ukraine in March. She is also currently under investigation by the Latvian security authorities as she is accused of being a Russian agent of influence in Latvia and in the European Parliament.

In general, the Latvian Russian Alliance supports stronger cooperation with Russia rather than with the EU. However, the party doesn't have much support at the moment and Zdanoka's chances of remaining in the European Parliament after the May election are slim.

Parties that voice moderate criticism of the EU are expected to win in the European Parliament elections in Latvia. Altogether, they are set to gain six of the country's eight seats according to predictions of PollWatch2014.eu.

The opposition party Concord Centre is expected to win three seats; the Union of Greens and Farmers and the National Alliance – both members of the current coalition government – will get two and one MEP respectively.